The central wall in Jana Gunstheimer's installation at the Art Institute features a large cutout of the Tribune's logo accompanied by a giant, delicately executed silhouette of a dilapidated high-rise. The ominous headline is "Status L Phenomenon"--also the title of the exhibit. A stack of newspapers, which visitors may take with them, announces "Members of upper class affected by inexplicable phenomenon of lost status." A smaller headline reads "Lake Point Tower plus two luxury villas suddenly replaced by affordable homes--Occupants seem different." It's reported that Lake Point Tower has been transformed into a rat-infested concrete-slab structure resembling a public housing project, and posh residences on LaSalle and Prairie have become ramshackle tract houses. Residents at home at the time of the transformation have been "brainwashed" and have taken on signifiers of underclass behavior. "Status L Phenomenon" is the name that's been given to the "instantaneous loss of material possessions, accompanied by adaptation of behavior to changed status and living conditions."

This "crisis" supposedly occurred June 4, 2007--exactly one month before the Fourth of July. And as with the Katrina and 9/11 disasters, insurance companies are reluctant to assume liability. People are fleeing Chicago in droves while President Bush makes vague proclamations about freedom, terrorism, and private property. A firm called "Besserem Trust" runs an advertisement declaring that "Capitalism Is Dead" but also reassures its potential customers that "Our management knows how to keep your total assets." Communists, aliens, and God are all blamed for the crisis, and one commentator argues that "politics should react immediately by forming an epidemic delegation to turn words rapidly into deeds so that, in the near future, science fiction can be based on life, rather than science fiction becoming reality."

Like innumerable other modern apocalyptic tales--Orson Welles's War of the Worlds broadcast, the Godzilla films, George Romero's Living Dead movies, The Day After, The Day After Tomorrow--Gunstheimer's "Status L Phenomenon" uses "news" reporting to enhance paranoia. This engaging, nuanced work combines political, design, narrative, and supernatural elements to blur the fictional context and create a sense of impending doom. Gunstheimer's paintings, mixed-media pieces, and mock newspaper all convey the terror implicit in panicking reporters and hysterical headlines, speaking to a fear that overshadows reason--fear of a negative miracle in which a nightmare doesn't overlap with waking life but engulfs it.

Prophecies of disaster can seem absurd, however, and as a result are often accompanied by gallows humor. Gunstheimer includes an eye-catching map, painted directly on one wall of the space, depicting the three devastated buildings in cartoony visual shorthand. Arrows lead to terse, hilarious descriptions of the events befalling the structures, the behavioral mutations of people on the premises (servants become subletters, a refined young woman becomes a white-trash metalhead), and "before" and "after" drawings of the drastically altered exteriors. Gunstheimer has also hung beautifully rendered watercolors of newspaper clippings, one of which features a homeless yuppie in a rolling office chair setting up his "home office" on a street corner. A Frankfurter Allgemeine headline announces the Chicago disaster ignorantly or ironically, declaring "Happy Birthday Amerika!" a month early. In these comic moments, Gunstheimer's installation calls to mind critical but funny fake news outlets like the Onion and the Daily Show.

But unlike more popular fabricators of fact, Gunstheimer relies less on clever blurbs than she does on uncanny images. She covers up nearly all the words in her painted press clippings, echoing the Communist censors of her childhood in East Germany. Her strongest art association is probably with the work of another German, Gerhard Richter's 1988 cycle of paintings called "October 18, 1977," detailing major events in the history of Germany's infamous Baader-Meinhof leftist terror cell (the date refers to "Death Night," in which three imprisoned group leaders died in an alleged suicide pact). Richter's paintings are blurry, monochromatic pieces derived from newspaper photos, filtered through his characteristic ghostly haze. Up through the late 1980s, the gang's doings had a certain celebrity appeal, similar to the Patty Hearst kidnapping or the Manson family murders.

The memories that Gunstheimer calls up in her spare architectural drawings are far less glamorous: she draws chilling parallels with the 2001 World Trade Center attacks and Chicago's destruction of high-rise public housing, inverting the dark nostalgia of Richter's images to create an unsettling oracular vision. Worried faces and empty, trashed interiors bespeak a harsh future, perhaps the future we deserve after years of shortsighted, ill-considered decisions.

Like other artists who experiment with the boundaries between truth-telling and fiction, such as the Museum of Jurassic Technology's David Wilson and the Atlas Group's Walid Raad, Gunstheimer has created an organization, Nova Porta. Though its doings are fictional, it has a Web site (www.nova-porta.org) and, unlike some other fictional entities, a coherent social agenda. Nova Porta's site, explicitly intended for "people without function," displays poetic, pithy insurrectionist phrases, such as "The increasing brutality, tendency to violence, and their escalation in our society harbor a social potential whose power has hitherto been little examined. We ought to make use of it" and "Individual life is a serialized crisis in miniature, a disaster that bears your name."

"Status L Phenomenon" is not a project of Nova Porta "members," though the newspaper points an accusing finger their way. But it's hard not to see a revolutionary subtext in the sudden reappropriation of property formerly reserved for the wealthy. Gunstheimer's approach is subtle, but her specificity recalls Hans Haacke's 1971 artwork about shady real estate dealings in Manhattan, a piece that got his solo show at the Guggenheim canceled. In Chicago, however, the current proliferation of gentrified tourist-friendly spaces is likely to seem negligible compared to what we'll see if and when the city lands its Olympics bid. On the other hand, the disproportionate distribution of wealth worldwide might actually lead to global shifts in society like the one depicted in "Status L Phenomenon."

As dry as this installation might seem at first, like earlier romantic German art--Joseph Beuys's performances and installations come to mind--it conflates anti-imperialist politics and pantheistic chaos. It also clearly draws on the straightforward approach of Fluxus protest art, like Yoko Ono and John Lennon's 1969 "War Is Over (If You Want It)" campaign, which emblazoned the statement on billboards and posters. Beneath the cold facade of Gunstheimer's exhibit are a relevant message and the warm handicraft of her pieces.